You have an idea, but no money yet. Whether it comes from a loan or from investors doesnt really make too much difference, since theres one thing that they all need to see before theyll give you a cent. This is called a business plan.
1. Whats a Business Plan?
Think of your business plan as being like a list of answers to questions that people might have about your home business. You will not get outside funding without one, because the people giving you the funding want to know that youve thought through what youre doing. A business plan says to them Ive considered this from every angle, and heres what Ive come up with.
2. But What Should Your Business Plan Include?
What is Your Service? This is the first question every business plan should answer. Just what is it that you plan to do? Tell them that industry youre going to be in, and why youve chosen it.
Who are Your Customers? Once you know what you do, the next thing you need to know is who youre going to be doing it for, and so thats the next thing that should be written on the business plan. You should also include your area here.
What Makes You Different? You need to say what the key factors are that make your business different to other businesses in its sector. What is it that youre planning to do to make the business succeed?
What are Your Expenses? Your start-up expenses include any equipment that you need before you can get up-and-running, while your day-to-day expenses are staff costs and supplies.
3. An Example
Note that this is a very short and sweet business plan: in real life, each one of these sections would be closer to a page in length. That said, it is a bad idea to go into too much detail in your plan. Youre not trying to tell the reader everything, just the basics of the business and why they should give you money to help you build it. Always focus on profit.
4. The Catering And Cake Company
Nature of Business:
The business will be a home-based catering company, producing luxury food for special occasions such as birthdays and weddings. We will provide a comprehensive catering service, with a special line in cakes, that have a higher profit margin than other foods.
The business is to focus on catering who want luxury but still care about cost. To begin with, our target area is within a ten-mile radius of Anytown, to include the affluent area of Othertown.
We will use industrial-quality ingredients but provide bespoke-quality design and service. This will allow us to provide food that looks excellent and tastes acceptable, while keeping costs low.
Since I will be using my kitchen for the business and making the food myself, there are only two real expenses: the one-off cost of a larger cooker, and then the day-to-day cost supplies. A suppliers letter listing prices is attached enquiries with others in the catering industry have shown this supplier to be the best value for my business.
To finish it all off, you should include a breakdown of projected profit and loss per month for the first year of the business, in the form of a graph. You would work this out by working out a reasonable repayment of any one-off expenses and adding this repayment to the day-to-day expenses, before graphing day-to-day expenses against projected sales. Your business plan should show you making enough of a profit each month to live if you doesnt, then it will be considered unfeasible by anyone you show it to.
5. Find Real Business Plans
Why not look at a real business plan? They're out there on the Internet. Once youve seen a few, you can start to get some idea of how much work is going to be involved to write one of your own. Remember, until your business exists for real, the business plan is a tool you need to constantly rethink and improve when new ideas come up to make the best out of it when it comes into reality.
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